Doubts on whether ERA’s Ranger 3 uranium mine can go ahead
Technical hitches bedevil ERA’s Ranger mine by: Matt Chambers The Australian July 12, 2014 http://www.theaustralian.com.au/business/mining-energy/technical-hitches-bedevil-eras-ranger-mine/story-e6frg9df-1226986174550 URANIUM producer Energy Resources of Australia could face more problems at its Ranger uranium mine in Kakadu National Park, flagging potential higher costs that Credit Suisse says could stop a planned underground expansion.
The Darwin-based Rio Tinto subsidiary said its Ranger 3 Deeps exploration decline project was experiencing tougher than expected geotechnical conditions. “Some geotechnical conditions have been encountered that are less favourable than assumed,” ERA said in its June quarter report, released on Thursday.
“These findings are being factored in to the mine design and the pre-feasibility study.”
While the market was little moved by the report on Thursday, Credit Suisse analyst Matthew Hope saw red flags.“We believe the results of the Deeps resource drilling are poor,” Mr Hope said yesterday in a note to clients.“The rock is probably heavily fractured, so extensive rock bolting and meshing will likely be required to prevent the access drives from collapsing,” Mr Hope said.
Credit Suisse downgraded its rating on ERA from outperform to underperform, and cut its target price by two-thirds from $1.50 to just 50c.
Mr Hope said value in ERA was almost entirely based on whether Ranger 3 Deeps would be mined. “If ERA announces at the end of this year that Ranger Deeps is not viable, then the share price should collapse to very low levels, with only option value remaining,” he said.
“Ranger Deeps either adds value or there is close to none, and risks are increasing towards the latter.”Ranger shares slipped 0.5c to $1.16 yesterday, giving the company a market value of $600m.
Troubled rare earths miner Lynas to move from Sydney to malaysia
Nervous investors ditch Lynas ahead of move to Malaysia July 3, 2014 The Age, Brian Robins Troubled rare-earth miner Lynas Corp is to shift its head office abroad as part of a renewed cost-cutting regime as the company seeks to stop haemorrhaging cash.
It also comes amid production difficulties at its recently commissioned Malaysian processing unit that have yet to be resolved, and as negotiations continue to refinance a key funding package.
Lynas said it would move its head office to Kuala Lumpur, from Sydney, which will result in an unspecified number of job losses, with further jobs to go at its Perth office…….Investors were unnerved by the latest news, pushing Lynas shares down 7 per cent to close at 13¢.
Lynas is not the only rare earths producer encountering ongoing problems in lifting output, with US group Molycorp also struggling to bed down a capacity expansion.
Equally important to Lynas Corp’s near-term progress is resolving negotiations to refinance a $US325 million loan, via Nomura.
There has been ”no material development” with this refinancing, a Lynas spokesman said.
To help shore up its balance sheet, Lynas recently raised $40 million from shareholders as well as replacing its chief executive. http://www.smh.com.au/business/nervous-investors-ditch-lynas-ahead-of-move-to-malaysia-20140702-3b8so.html#ixzz36Xf4ozEk
The real cost to Queensland of uranium mining may be very high
Queensland lifts its uranium ban, but is the price worth the cost? The Conversation Maxine Newlands Lecturer in Journalism, Researcher in Environmental Politics at James Cook University Liz Tynan Senior Lecturer and Co-ordinator Research Student Academic Support at James Cook University 1 July 14,
As of today, Queensland has lifted a 32-year ban on uranium mining. That decision was taken within months of the 2012 state election, despite Premier Campbell Newman’s pre-election promise not to restart mining the radioactive mineral.
Miners are being invited to apply to restart the industry under the Queensland’s government’s uranium action plan, which will mean Canadian company Mega Uranium can reopen the Ben Lomond and other mines in north Queensland.
Queensland’s resumption of uranium mining comes only days after Australia’s newest uranium mine, Four Mile in South Australia, officially opened on 25 June.
Yet the price of uranium has fallen from a high in 2007 of US$70 a pound to $US28, due to factors including oversupplyand what the Wall Street Journal has described as a “post-Fukushima funk”.
Given the prices are so low that The Australian has reportedthat Four Mile is already losing money, while the Beverley mine has been mothballed since January, why are Australian states looking to open more mines?………….
Battles ahead over Queensland exports
The highest concentration of Queensland’s uranium mines sit in the northern tropics, an area prone to Category 5 cyclones.
A 2013 Swiss study found uranium was far more mobile than originally thought. Uranium once extracted, becomes soluble in water, increasing the chances of contamination or radioactive dust carried in high winds and heavy rainfall.
If Ben Lomond is reopened, the quickest way to export its uranium would be through the city of Townsville, home to 190,000 people, which is only 50km from the mine.
The Port of Townsville has said it has the capability to “facilitate the transportation and export of yellowcake”. The Queensland’s government’s uranium action plan recommends that:
Queensland’s efforts should be [put] on facilitating the use of existing ports and shipping lanes by industry for the export of uranium.
However, the Port of Townsville sits within the Great Barrier Reef World Heritage Area and close to sensitive environments including the Great Barrier Reef Marine Park, dugong protected areas, seagrass beds, fringing coral reefs and mangrove forests.
Last year, Great Barrier Reef Marine Park Authority chairman Russell Reichelt told the ABC that:
I think shipping of any toxic cargo would be of concern. But really we would have to see a proposal and we would have to consider that.
So this is set to be a contentious issue: while economic development of the north has bipartisan support at a federal, state and local government level, a number of locals and environmental groups have said they will challenge any plans to reopen uranium mines and exports from Queensland.
The big question for Queensland residents to consider now is whether the return of uranium mining to the state will be worth the wait for the uranium price to recover, given the risks attached to transporting the mineral through populated and environmentally-sensitive areas.http://theconversation.com/queensland-lifts-its-uranium-ban-but-is-the-price-worth-the-cost-28105
Costly problems, legal battles, face owners of Four Mile uranium mine
Four Mile mine opens amid tensions between owners, World Nuclear News, 26 June 2014 The Four Mile uranium mine in South Australia was officially opened on 25 June, but its minority owner wants to sell its stake and is preparing a legal battle against the project operator…….EdwardSterck, a senior mining analyst at London-based BMO Capital Markets, said he did not think there was “any huge significance” in the opening of Four Mile. “It appears that they are using the existing Beverley plant which suggests that production from Four Mile is replacing production at Beverley,” Sterck told World Nuclear News.
Quasar Director Dave Roberts said there is remaining ore at the Beverley mine that “can and will be” extracted at a future point in time. “But today, we are dedicating the full processing capacity of Beverley to the production of Four Mile uranium,” Roberts said during TV coverage of the opening ceremony.
ACE’s parent company Melborne-based Alliance Resources announced last week it had appointed Deloitte Corporate Finance to lead the sale of its 25% stake in the project. Alliance said the sale would “free up funds” for the company to develop its exploration portfolio.
In the meantime, the court case is looming for ACE’s 2010 filing against Quasar Resources – on the basis of “misleading and deceptive conduct” – having been set for 30 June.
ACE has said it is “seeking restitution for the 75% interest in the exploration licence for Four Mile, citing, among other issues, Quasar’s failure to disclose information relating to the prospectivity of part of the tenement.” ACE also contends that Quasar, “with the assistance or participation of” its affiliate Heathgate Resources, breached its obligations under the joint venture agreement……..
ACE said in January it had elected to vote against Quasar’s revised start-up plan for the Four Mile project, which would see uranium capture at Heathgate’s Pannikan plant, and precipitation, drying and packing at Heathgate’s Beverley processing plant. ACE said the parties should instead construct a stand-alone plant at Four Mile in order to reduce operating costs. Heathgate Resources, which like Quasar is based in Adelaide, is the owner and operator of the Beverley uranium mine in the Northern Flinders Ranges.
First discovered in 2005, the Four Mile uranium deposit is 550 km north east of Adelaide in the Frome Basin. State and federal regulators approved the mining lease for the project in April 2012 and more than AUD 120 million ($113 million) has been invested so far, the government said. The mine’s owners expect to produce up to 1.6 million pounds from the mine this year, it said. http://www.world-nuclear-news.org/ENF-South-Australias-Four-Mile-uranium-mine-opens-amid-tensions-between-its-owners-26061401.html
Sorry tale of woe about Australia’s uneconomic uranium mines
Price fallout hits uranium mines THE AUSTRALIANJUNE 26, 2014 Sarah Martin Political Reporter Adelaide
The bleak outlook comes as the Four Mile uranium mine in South Australia’s northern Flinders Ranges was yesterday opened after five years of delays.
Four Mile is a joint venture project between Melbourne-based Alliance Resources and Quasar — a subsidiary of Heathgate Resources that is owned by US defence and nuclear physics company General Atomics.
The mine, which becomes Australia’s fifth and South Australia’s fourth uranium mine, began production in April to feed the processing plant at the site of the neighbouring Beverley uranium mine, also owned by Heathgate.
But the company said yesterday that the Beverley mine was no longer operational, and had been mothballed in January because of low uranium prices.
This comes after Canadian company Uranium One announced in November that it would cease production at the Honeymoon uranium mine, also in outback South Australia. Since the Fukushima incident in 2011, uranium prices have tumbled from a high of $US70 a pound to $US28.50.
Quasar director Dave Roberts said Four Mile was also “not economic” because of weak uranium prices. “We have got prices of $US28 a pound and I would expect … costs of production may be higher than that,” Mr Roberts said yesterday…….. http://www.theaustralian.com.au/business/price-fallout-hits-uranium-mines/story-e6frg8zx-1226966903070?nk=38b4e03626cff750bb726e65c1a3e9f4
Japan’s plans to restart nuclear reactors – not likely to save Paladin
Japan to restart nuclear reactors: Will it save Paladin Energy Ltd? http://www.fool.com.au/2014/06/23/japan-to-restart-nuclear-reactors-will-it-save-paladin-energy-ltd/ By Mike King – June 23, 2014 Plans to restart at least two of Japan’s 48 nuclear reactors could have positive implications for the price of uranium and deliver a boost to ASX-listed uranium miners, including Paladin Energy Ltd (ASX: PDN).
According to The Diplomat, Japan’s Nuclear Regulation Authority (NRA) is about to begin safety inspections on at least one power plant. Japan’s nine nuclear power companies all have plans to restart their nuclear reactors.
But with 58% of Japanese people opposing any restart, and 59% opposing the use of nuclear energy to kickstart economic growth, the government and the energy providers will have their work cut out for them. The issue for Japan is that meeting peak summer energy demand without the nuclear power plants is going to be tough.
Uranium prices have crashed since the Fukushima incident in 2011, losing a further 30% in the last year to hit US$28.15 a pound. That’s well below the cost of production for most uranium miners. And in the short to medium term the outlook is not good, with RBC Capital Markets Analysts forecasting a price of US$31.50/lb this year and US$40 for 2015. But RBC has slashed its forecasts for 2016 to 2018 to between US$40 to US$45/lb, amid expectations that the uranium market will be in surplus until 2021.
Paladin’s cost of production in the last quarter at its Langer Heinrich mine stood at US$29/lb – and that’s not the all-in sustaining cost. The company was forced to place its other main mine Kayelekera mine on care & maintenance, with its production cost running at US$32.90/lb in the last quarter.
So it appears that the tough times will continue for Paladin and other ASX-listed uranium miners, including Energy Resources of Australia Limited (ASX: ERA) – which is majority-owned by Rio Tinto Limited (ASX: RIO). Investors may want to skip the uranium producers for now.
Energy Resources of Australia – uranium company expecting an even huger loss this time
Energy Resources of Australia expects loss http://www.marketwatch.com/story/energy-resources-of-australia-expects-loss-2014-06-05-14855444?link=MW_latest_news By Ross Kelly SYDNEY–Uranium producer Energy Resources of Australia Ltd. expects a first-half loss of up to 140 million Australian dollars (US$130 million) after a radioactive leak halted activities at its Ranger operation in the Northern Territory.
The company, which is 68% owned by Rio Tinto PLC, said it expects to restart operations at Ranger progressively beginning Thursday after cleanup and regulator approval.
The leak of about 1 million liters of contaminated slurry, which occurred in December, was caused by toxic material eating through a steel tank involved in the process of refining ore. Investigations by authorities found the leak was contained within the mine site.
The company had already stopped mining uranium at the Ranger operation in late 2012 after its ore was depleted. But it continued to process stockpiled ore while it studied the feasibility of digging a new underground pit there called Ranger 3 Deeps.
The company expects a loss of A$120 million and A$140 million for the six months through December, in large part due to costs associated with the suspension of ore processing. That compares to a A$53.4 million loss in the year-earlier period.
Energy Resources of Australia has run up a string of losses in recent years, dogged by low uranium prices, disappointing output volumes and costs associated with the rehabilitation of the old mine site.
The collapse of uranium company Paladin’s share price
Why the Paladin Energy Share Price Fell Today What Happened to the Paladin Energy Share Price? Shares of Paladin Energy [ASX:PDN] fell by 3.95% on Wednesday, closing at 36.5 cents. This was the lowest closing price in nearly 10 years of trading! , Money Morning 5 June 14 Why Did This Happen to the Paladin Energy Share Price?
Paladin Energy Limited is a uranium production and exploration company with projects currently in Australia, Canada, and Africa. The Langer Heinrich mine in Namibia is its flagship project.
Since the Fukushima uranium plant meltdown in 2011, the uranium industry has never been the same. Following this event, the Japanese government turned off all of its 54 uranium power plants.
The uranium spot price is now trading at around US$28.25 per pound, a level not seen since April 2005. Certain estimates now place up to 60% of current annual global production with costs above the current spot price, which is unsustainable.
For years, Paladin experienced financing, production, and profitability issues. And last week it officially temporarily closed its Kayelekera mine in Malawi.
For this plant to restart operations, Paladin wants to see a uranium price between US$70–75 dollars per pound, which implies that the breakeven price for Kayelekera is significantly above the current spot price. Overall the share price is declining because of a poor uranium environment. Last week, Japan announced that it won’t restart any reactors during 2014 — something that uranium punters were betting on.
Australian govt to open up nuclear weapons test site to Aboriginal people, AND to uranium mining!
Traditional Maralinga Tjaruta people gain unrestricted access to rehabilitated land where nuclear testing occurred news.com.au 3 June 14 The federal government will on Wednesday announce 1782 square km in area will be formally excised from the Woomera Prohibited Area at the request of the Maralinga Tjaruta people……..
Maralinga Tjarutja general manager Richard Preece said the decision would enable the traditional owners to enter section 400 without seeking approval from the Defence Department.
“We didn’t think it’s sensible to have within the range something that would probably be the last place in Australia you’d want to drop bombs on,’’ Mr Preece said…….
Nuclear testing was conducted by the British government in Australia between 1952 and 1963.
Maralinga was officially closed in 1967.
The federal government hopes a bill opening the Woomera Prohibited Area for exploration and mining will be passed by Parliament during its winter sittings. Up to $35 billion worth of iron ore, gold and uranium is believed to lie beneath the ground in the prohibited area.
If the bill becomes law, it will create a new access regime for non-Defence users.
The State Government and federal Labor MPs have been pushing for the bill to be passed as soon as possible, arguing it will create new economic opportunities for South Australia, which could help offset the impact of the Holden closure. http://www.news.com.au/national/south-australia/traditional-maralinga-tjaruta-people-gain-unrestricted-access-to-rehabilitated-land-where-nuclear-testing-occurred/story-fnii5yv4-1226942188796
Uranium company gives up – switching to property development
United Uranium Limited moving from resources exploration to property development United Uranium Limited moving from resources exploration to property development http://www.proactiveinvestors.com.au/companies/news/55373/united-uranium-limited-moving-from-resources-exploration-to-property-development-55373.html June 02, 2014 United Uranium Limited moving from resources exploration to property development
United Uranium Limited (ASX:UUL) is exploring opportunities that will most likely result in a shift away from resources exploration to property development in a bid to increase shareholder value.
This follows completion of a strategic review that identified the unwillingness of the investment community to invest in junior resources companies, particularly those focused on uranium.
It added the early stage status of its projects required significant funding to explore, with no guarantee of commercial success.
These add to the continued depressed uranium prices, and commodities prices in general.
In contrast, it noted that investors were willing to invest in property developments with the sector currently experiencing strong housing demand.
Investors flee as uranium price collapses even further
A uranium price collapse has made mining companies radioactive to investors, Quartz By Jason Karaian May 28, 2014 Here’s the latest sign that uranium-mining doesn’t pay: Paladin Energy, an Australian uranium mining group, announced today that it was ceasing production(pdf) at a key mine in Malawi. The move will take 3.3 million pounds of uranium per year off the market.
Paladin is far from alone. As uranium prices have tumbled, others have been feeling the pinch. Indeed, for some 60% of global uranium production, the cost of extraction is higher than the market price for the commodity, the firm says.
Uranium prices have been hit by a series of setbacks in recent years, from a global financial crisis that put a big dent in nuclear power demand, to a glut ofdecommissioned weapons-grade uranium, to the Fukushima nuclear disaster in Japan, which led to the shutdown of all that nation’s nuclear power plants and inspired nuclear phase-outs in places such as Germany and Switzerland.Investors in uranium mines have seen their assets plunge in value:……http://qz.com/213889/a-uranium-price-collapse-has-made-mining-companies-radioactive-to-investors/
Can things get any worse for Australia’s uranium industry?
Specious comparisons between Australian uranium and Saudi oil have also been made by former South Australia premier Mike Rann, pseudo-academics Ian Plimer and Haydon Manning, Access Economics, and Comrade Paul Howes from the Australian Workers Union.
But Australia’s uranium export revenue in 2011 was 466 times lower than Saudi oil revenue in the same year − Australia would need to supply entire global uranium demand 31 times over to match Saudi oil revenue. The uranium industry accounts for 0.015 per cent of jobs in Australia, and in the 10 years from 2002-11 it accounted for just 0.29 per cent of national export revenue (with most of that revenue never coming anywhere near Australia because of the high level of foreign ownership).
The uranium industry hoped that the post-Fukushima spot price would rebound after it fell to $US50/pound … but then it fell to $US40 … and now it has fallen below $US30.
The uranium spot price fell to $US29/pound U3O8 on May 5 and has not budged since. Not since mid-2005 has the price been so low. The price is less than one-half of the pre-Fukushima price, and less than one-quarter of the price at the peak of the 2007 bubble.Uranium Investing News notes that “the phrase ‘uranium renaissance’ has been uttered so often that it has begun to feel like a bad joke”.
What’s going on?
The uranium lobby has been arguing that plans to begin restarting reactors in Japan later this year (all of Japan’s 48 reactors are currently shut-down in the wake of the Fukushima disaster) will lead to higher uranium prices. But as As FNArena notes, progress towards reactor restarts in Japan “has been glacial and anti-nuclear protest has been powerful”.
Japan’s uranium inventories probably amount to around 100 million pounds (45,400 tonnes) according to David Sadowski, a Raymond James analyst.
Sadowski added that many utilities around the world “are sitting on near-record piles” of uranium. It could take a decade or more before Japanese utilities exhaust existing inventories.
China is buying uranium − but is now sitting on stockpiles sufficient to meet current annual consumption eight times over. The uranium lobby hoped that the December 2013 end of a US-Russian agreement to downblend weapons uranium for use in power reactors would stimulate a price increase. But the spot price has fallen 17 per cent this year alone.
French state-controlled nuclear group Areva’s first-quarter revenue from its uranium mining unitfell 63 per cent. The mining arm of Russia’s state-controlled utility Rosatom has frozen uranium expansion projects in Russia and elsewhere (hence the Honeymoon mine in South Australia has been put into care-and-maintenance). Canadian giant Cameco has abandonedits earlier uranium production growth targets (and scaled back uranium exploration and development work in Australia). In 2012 BHP Billiton cancelled its planned expansion of Olympic Dam in South Australia and disbanded its uranium division. Wannabe uranium miner Marathon Resources gave up on the uranium game last year, stating that the “risks were more likely to exceed rewards”. Energy Resources of Australia is struggling with the political and economic fallout of a December 2013 leach tank collapse at the Ranger mine in the Northern Territory resulting in the spillage of 1.4 million tonnes of radioactive slurry; the collapse of a ventilation shaft a few weeks ago; and the revelations of a whistleblower published in the Mining Australiamagazine on May 5.
Australian-based Paladin Energy operated two mines in Africa but production at one of those mines has been suspended and the company is at risk of going bankrupt. As Paladin Energy chief executive John Borshoff said last July, “the uranium industry is definitely in crisis”.
A nuclear insider’s view
Just about everyone in and around the uranium industry consoles themselves with the thought that uranium prices will have to rebound sooner or later to stimulate new production, which will be required even if global nuclear power capacity continues to stagnate. A contrary view comes from Steve Kidd, an independent consultant and economist with 17 years of work at the World Nuclear Association and its predecessor, the Uranium Institute.
Writing in the Nuclear Engineering International Magazine on May 6, Kidd states that “the case made by the uranium bulls is in reality full of holes” and he predicts “a long period of relatively low prices, in which uranium producers will find it hard to make a living”……http://www.businessspectator.com.au/article/2014/5/29/energy-markets/uranium-%E2%88%92-how-low-can-it-go
Terminally ill? Paladin closes its uranium mine in Malawi
Paladin to shut its uranium mine, Australian Mining, 27 May, 2014 Cole Latimer Paladin has announced it will cease production at its Kayelekera uranium mine in Malawi.
It comes after the miner advised it would place the operation in to care and maintenance earlier this year.
According to Paladin it is ceasing production “due to reasons beyond the company’s control and related to the depressed uranium prices”.
On May 21 it halted all operations at the mine, and will now cease supplying uranium to the global market, causing a drop of around 3.3 million pounds of supply per annum.
“The outcome is an unfortunate but direct consequence of the continuing deterioration in the uranium price,” the company said in a statement. “Certain estimates now place up to 60% of current annual global production with costs above the current spot price, which is unsustainable.”…..http://www.miningaustralia.com.au/news/paladin-to-shut-its-uranium-mine
No future in sight for Yeelirrie or Kintyre uranium mines, nor for Olympic dam expansion
Uranium fall dents Olympic outlook BARRY FITZGERALD THE AUSTRALIAN MAY 27, 2014 BHP Billiton’s recasting of its expansion plans for its Olympic Dam copper/uranium mine in South Australia’s outback have been served up a new challenge — the collapse in uranium prices.
Spot uranium has fallen 30 per cent in the past 12 months to $US28.15 a pound, plunging most of the world’s uranium-only mines into losses. More telling has been the steady decline from the record price of $US137 a pound in mid-2007, due in part to the fall in demand in the wake of Japan’s Fukushima nuclear disaster in 2011.
BHP dropped plans for a big-bang expansion of Olympic Dam in mid-2012, blaming the $30 billion cancellation on the over-heated resources sector and the country’s high-cost environment. Concerns about uranium’s outlook post-Fukushima was also a factor……….
When it shelved the big-bang expansion plan, BHP said it would investigate a less capital-intensive design, and one that drew on new mining and processing technologies to improve the economics of the project.
BHP chief executive Andrew Mackenzie also undertook in September to say more about plans for the expansion “within about a year’’. While that timing is almost up, BHP’s considerations of what the price slump means for the future of what is the world’s biggest uranium deposit makes its planning for an expansion all the more complex.
Like the rest of the industry, BHP will be pinning its hopes on the restart of nuclear power plants in Japan, and the forecast surge in China’s nuclear power industry, to eventually produce more sustainable prices — in the context of being able to make a profit from the material at any rate……..
“uranium prices continue to suffer downward pressure and we do not see any reason to expect improvement soon.’’ -Tim Gitzel, the chief executive of Canadian uranium giant Cameco, which owns two of the world’s biggest undeveloped uranium deposits in Western Australia — Yeelirrie and Kintyre.
That means that neither Yeelirrie, acquired from BHP, and Kintyre, acquired from Rio Tinto, are about to be developed anytime soon…..
Glut of uranium, prices plummet, Australian company Paladin’s share price drops 4.6%
Uranium Slides as Banks Reduce Outlook Amid Japan Delays, Bloomberg, 18 May 14 By Ben Sharples Delays in restarting Japan’s nuclear reactors are prolonging a uranium supply glut that’s driven prices to an eight-year low, making banks from UBS AG to Credit Suisse Group AG less bullish on the fuel.
Uranium dropped to $29 a pound on May 2, the lowest since June 2005 and extending this year’s drop to 16 percent, according to TradeTech, a Denver, Colorado-based consultant to the nuclear industry. UBS reduced its 2014 forecast by 9 percent last month as Credit Suisse cut its projection by 7 percent.
Kansai Electric Power Co. (9503) and other utilities are taking longer than expected to restart reactors that closed after the Fukushima disaster in March 2011 as Japan’s nuclear regulator seeks more safety checks. While producers from Australia to Africa shut mines as prices retreated to unprofitable levels, Raymond James Ltd. is among those who say supply will still outstrip demand this year.
“There is too much supply floating around the marketplace and demand is highly limited,” said David Sadowski, a Vancouver-based analyst at Raymond James, a financial adviser, who cut his 2014 forecast by 14 percent to $36 a month ago. “Japanese restarts are the key catalyst to get utilities to resume long-term contracting, which should support prices.”
Uranium for immediate delivery averaged $33.93 this year, compared with $38.47 in 2013 and $46.27 in 2010, the year before the earthquake and meltdown of the Fukushima Dai-Ichi plant and subsequent closure of Japan’s reactors for safety checks. Uranium closed at $28.40 yesterday on the New York Mercantile Exchange………
Forecasts Cut
UBS reduced its 2014 forecast for uranium on April 9 to $39, while Credit Suisse cut its estimate to $38.80, according to an April 1 note. The exit of traders such as Goldman Sachs Group Inc. from the market is also reducing transactions, according to Roswell, Georgia-based Ux Consulting Co.
Deutsche Bank AG is cutting back parts of its commodities business including uranium, Nick Bone, a London-based spokesman, said by e-mail May 7. Michael DuVally, a spokesman for Goldman Sachs in New York, declined to comment in an e-mail on the sale of its unit trading the fuel………
Prices are below the marginal cost of production of $35 estimated by UBS. Paladin Energy Ltd. said in February it will halt its Kayelekera operation in Malawi while Russia’s Atomredmetzoloto last year shuttered Honeymoon in Australia. Kazakhstan, the world’s biggest producer, said in November it will halt all projects to increase output after the decline.
Paladin, which gets all of its revenue from selling uranium, fell as much as 4.6 percent today in Sydney trading………http://www.bloomberg.com/news/2014-05-15/uranium-slides-as-banks-reduce-outlook-amid-japan-delays.html
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